Epoxy, Inc. - FORM 10-Q

Attached files

file	filename
EX-32.1 - CERTIFICATION - Epoxy, Inc.	ex321.htm
EX-31.2 - CERTIFICATION - Epoxy, Inc.	ex312.htm
EX-31.1 - CERTIFICATION - Epoxy, Inc.	ex311.htm
EXCEL - IDEA: XBRL DOCUMENT - Epoxy, Inc.	Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended March 31, 2015

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from __________ to __________

000-53669
Commission File Number

EPOXY, INC.
(Exact name of registrant as specified in its charter)

Nevada	N/A
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2518 Anthem Village Drive, Suite 100, Henderson NV	89052
(Address of principal executive offices)	(Zip Code)

702-350-2449
(Registrant’s telephone number, including area code)


(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [ ] No [ X ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[ ]	Accelerated filer	[ ]

Non-accelerated filer	[ ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

190,617,889 shares of common stock outstanding as of May 20, 2015

(Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.)

EPOXY, INC.

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9

Item 4.	Controls and Procedures	9

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	10

Item 1A.	Risk Factors	10

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10

Item 3.	Defaults Upon Senior Securities	10

Item 4.	Mine Safety Disclosures	10

Item 5.	Other Information	10

Item 6.	Exhibits	11

	SIGNATURES	12

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

	Page
Unaudited Consolidated Balance Sheets as of March 31, 2015 and December 31,2013	F-1
Unaudited Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014	F-2
Unaudited Consolidated Statement of Cash Flows for the three months ended March 31, 2015 and 2014	F-3
Notes to the Unaudited Consolidated Financial Statements	F-4 to F-11

EPOXY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2015			December 31, 2014
ASSETS
Current
Cash	$	145,042		$	63,953
Accounts receivable		880			880
Prepaid expenses		8,000			-
Deferred financing costs		23,836
Total Current Assets		177,758			64,833

Vehicle		17,927			20,758
Trademark and Patent		7,695			7,695

Total Assets	$	203,380		$	93,286

LIABILITIES
Current
Accounts payable and accrued liabilities		116,478			104,213
Loan payable		32,000			32,000
Derivative liabilities		2,869,447			2,251,429
Convertible notes, net of unamortized discount		194,095			105,067
Total Current Liabilities		3,212,020			2,492,709

Total Liabilities		3,212,020			2,492,709

STOCKHOLDERS’ DEFICIT
Preferred Stock, $0.00001 par value;
authorized: 35,000,000 Series A Preferred shares, 25,080,985 issued and outstanding as of March 31, 2015 and December 31, 2014		251			251
authorized: 15,000,000 Series B Preferred shares, no shares issued and outstanding as of March 31, 2015 and December 31, 2014		-			-
Common Stock, $0.00001 par value;
authorized: 480,000,000 shares, 178,323,943 and 176,594,122 shares issued and outstanding as of December 31, 2014 and December 31, 2014, respectively		1,783			1,766
Additional Paid-in Capital		28,385			(168,477	)
Accumulated deficit		(3,039,059	)		(2,232,963	)
Total Stockholders’ Deficit		(3,008,640	)		(2,399,423	)
Total Liabilities and Stockholders’ Deficit	$	203,380		$	93,286

The accompanying notes are an integral part of these unaudited consolidated financial statements

F-1

EPOXY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended March 31,
	2015			2014

Revenue	$	8,315		$	4,385

Operating Expenses
Depreciation		2,831			-
General and administrative expenses		92,136			31,994
Total operating expenses		94,967			31,994
Loss from operations		(86,652	)		(27,609	)

Other Income (Expenses):
Gain (Loss) on change in fair value of derivative liabilities		(566,334	)		2,974
Interest expenses		(153,110	)		(11,432	)
Total other expenses		(719,444	)		(8,458	)

Net loss	$	(806,096)		$	(36,067	)

Net loss per share – basic and diluted	$	(0.00	)	$	(0.00	)

Weighted average shares outstanding – basic and diluted		177,209,170			168,824,706

The accompanying notes are an integral part of these unaudited consolidated financial statements

F-2

EPOXY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three months ended
	March 31,
	2015			2014
Cash flows from Operating Activities
Net loss	$	(806,096	)	$	(36,067	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		2,831			-
Loss on change in fair value of derivative liabilities		566,334			(2,974	)
Accretion of discounts on convertible notes		135,802			6,732
Accretion of deferred financing costs		6,164			-
Imputed interest		175			1,493
Foreign exchange in loan payable		-			(1,349	)
Changes in operating assets and liabilities:
Accounts receivables		-			1,250
Prepaid expenses		(8,000	)		-
Accrued expenses		(7,004	)		3,208
Accounts payable		20,883			(1,435	)
Net cash used in operating activities		(88,911	)		(29,142	)


Cash flows from Financing Activities
Proceeds from convertible notes		200,000			-
Deferred financing costs		(30,000	)		-
Net cash provided by financing activities		170,000			-

Increase (decrease) in cash during the period		81,089			(29,142	)
Cash, beginning of period		63,953			30,467
Cash, end of period	$	145,042		$	1,325

Supplemental disclosure of cash flow information:
Cash paid for:
Interest	$	-		$	-
Income taxes	$	-		$	-

Supplemental non-cash investing activities:
Debt principal converted to shares		46,775			-
Accrued interest converted to shares		1,613			-
Derivative liability reclassified as additional paid in capital		148,316			-
Derivative liability – debt discount		200,000			-

The accompanying notes are an integral part of these unaudited consolidated financial statements

F-3

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Description of business and basis of presentation

Organization and nature of business

Neohydro Technologies Corp. (the “Company”) was incorporated in the State of Nevada on November 13, 2007 as Rioridge Resources Corp. On July 22, 2008, the Company changed its name to Neohydro Technologies Corp.

On August 1, 2014, the Company’s name changed from NeoHydro Technologies Corp. to Epoxy, Inc. in furtherance of actions taken on May 23, 2014, when the Board of Directors of the Company (the “Board”) approved, and recommended to the Majority Stockholders that they approve the Name Change. On May 27, 2014, the Majority Stockholders approved the Name Change by written consent in lieu of a meeting, in accordance with Nevada law. On August 4, 2014, the Company submitted the Name Change to FINRA for their review and approval, as well as the approval of a symbol change from NHYT to EPXY. The Company filed an amendment to our Articles of Incorporation with the Secretary of State of Nevada changing our name to Epoxy, Inc. effective on August 1, 2014.

The Company, through its wholly owned subsidiary, Couponz, Inc., is the developer of Epoxy app, an application or "app" for iPhone iOS and Android operating systems. Epoxy is an innovative smart phone application designed and created to conveniently connect business owners and consumers in order to ease marketing frustrations. The mobile app gives loyal customers the ease of keeping track of rewards and punch cards all in one place while also giving opportunities to review and share businesses with friends. In turn, Epoxy provides businesses the ability to reward customers, share offers, and deliver information about special events with their customers.

Financial Statements Presented

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the three month period ended March 31, 2015, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2015. For further information refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 as filed with the Securities and Exchange Commission on April 15, 2015.

Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.

Note 2 – Going Concern

At March 31, 2015, the Company had net losses of $806,096. The Company believes that its existing capital resources may not be adequate to enable it to execute its business plan. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The Company estimates that it will require additional cash resources during 2015 based on its current operating plan and condition. The Company expects cash flows from operating activities to improve, primarily as a result of an increase in revenue and a decrease in certain operating expenses, although there can be no assurance thereof. The accompanying consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If we fail to generate positive cash flow or obtain additional financing, when required, we may have to modify, delay, or abandon some or all of our business and expansion plans.

F-4

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3- Fair Value Measurements

FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument.

The following table provides a summary of the fair value of our derivative liabilities as of March 31, 2015 and December 31, 2014:

	Fair value measurements on a recurring basis
	Level 1		Level 2		Level 3
As of March 31, 2015:
Liabilities
Embedded derivative	$	-	$	-	$	2,869,447

As of December 31, 2014:
Liabilities
Embedded derivative	$	-	$	-	$	2,251,429

Note 4- Loans Payable

During the month of July 2014, the Company entered into 5% one-year promissory notes for a total of $20,000. At March 31, 2015, the Company is indebted to these unrelated third parties in the amount of $20,000 (December 31, 2014 - $20,000).

At March 31, 2015, the Company is indebted to unrelated third parties for $12,000 (December 31, 2014 - $12,000. The loan is non-interest bearing and is due on demand. During the three months ended March 31, 2015, the Company recorded imputed interest of $175.

F-5

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5- Convertible Notes

(1)	Convertible notes due on November 27, 2015:

On November 27, 2012, the Company entered into certain convertible loan agreements with four (4) investors. The Company received a total of $125,000 which bears interest at 10% per annum and is due on November 27, 2015. Interest shall accrue from the advancement date and shall be payable quarterly. Any portion of the loan and unpaid interest are convertible at any time at the option of the lender into shares of common stock of the Company at a conversion price of $0.0005 per share. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $125,000 as additional paid-in capital and reduced the carrying value of the convertible debenture to $nil. The carrying value will be accreted over the term of the convertible debentures up to its face value of total of $125,000.

On August 1, 2014 the Company successfully amended the terms of certain convertible loan agreements with four (4) investors for a total of $125,000 due and payable on November 27, 2015. Under the amended terms, a total of $125,000 originally available for conversion into a total of 250,000,000 shares of common stock at $0.0005 per share has been amended to reflect a price of $0.005 per share for a total of 25,000,000 shares of common stock, if converted. The Company determined that the amended qualified as a substantial modification under ASC 470-60.

The Company analyzed the conversion feature of above Convertible Notes for derivative accounting consideration under FASB ASC 470 and determined that the conversion feature did not create embedded derivatives.

The Company analyzed the above amendment under ASC 470-60 and concluded that the amendment to the conversion terms qualified as a substantial modification and as such the unamortized discount of $88,184 was recorded as loss on extinguishment of debt. The Company recalculated the intrinsic value of the embedded beneficial conversion feature of $125,000 this has been recorded at the discount on the convertible note. The carrying value will be accreted over the term of the convertible debentures up to its face value of total of $125,000.

The carrying value of certain convertible notes is as follows:

	August 1, 2014 Recalculation			December 31, 2014			March 31, 2015
Face value of certain convertible notes	$	125,000		$	125,000		$	125,000
Less: unamortized discount		(125,000	)		(116,702	)		(105,467	)
Carrying value	$	-			8,298		$	19,533

As at March 31, 2015, the carrying values of the convertible debenture and accrued convertible interest thereon were $19,533 and $3,082, respectively.

(2)	Convertible note due on August 22, 2015 (CN#1)

On August 22, 2014, the Company entered into a convertible loan agreements with an investor (the “CN#1”), where under the Company has issued two 8% convertible redeemable notes in the aggregate principal amount of $250,000 with the first note being $125,000 and the second note being $125,000, , convertible into shares of the Company’s common stock upon the terms. Any portion of the loan and unpaid interest are convertible at any time at the option of the lender into shares of common stock of the Company at a conversion price equal to 52% of the lowest trading price of the Common Stock as reported on the OTCQB exchange for the twelve (12) prior trading days including the day upon which a Notice of Conversion is received by the Company.

On August 22, 2014, the Company received net proceeds totaling $106,250 in respect to the first of the two notes in the totaling gross amount of $125,000. Financing fees of $12,500 and legal fees of $6,250 were paid in respect of the back end note which is due and payable on August 22, 2015.

F-6

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5- Convertible Notes

(2)	Convertible note due on August 22, 2015 (CN#1) (cont’d)

On January 15, 2015 and February 26, 2015 respectively the Company received net proceeds from an investor totaling $63,750 and $42,500 in respect to the second of the two notes in the total gross amount of $125,000. Financing fees of $12,500 and legal fees of $6,250 were paid in respect of the back end note which is due and payable on August 22, 2015.

On February 27, 2015, the company received a conversion notice from the aforementioned investor requesting to convert $40,000 in principal and $1,613 interest from the first note into 1,141,587 shares at $0.036452.

(3)	Convertible note due on April 16, 2015 (CN#2)

On September 17, 2014, the Company entered into a convertible loan agreements with an investor (the “CN#2). The Company received net proceeds totaling $88,000 in the totaling gross amount of $100,000 which bears interest at 10% per annum and is due on April 16, 2015. Financing fees of $10,500 and legal fees of $2,000 were paid in respect of the note which is due and payable on April 16, 2015. Interest shall accrue from the advancement date and shall be payable on April 16, 2015. Any portion of the loan and unpaid interest are convertible at any time at the option of the lender into shares of common stock of the Company at a conversion price of the lower of (1) a 50% discount to the average of the three lowest daily trading prices for the previous twenty (20) trading days to the date of conversion; or (2) a 50% discount to the average of the three lowest daily trading prices for the previous twenty (20) trading days before the date that this note was executed.

On March 26, 2015, the company received a conversion notice from this investor requesting to convert $6,775 in principal from the second note into 588,235 shares at $0.01152.

(4)	Convertible note due on January 13, 2016 (CN#3)

On January 13, 2015 the Company entered into a Securities Purchase Agreement (“SPA”) with Adar Bays, LLC (“Adar”) a Florida Limited Liability company where under the Company has issued two 8% convertible redeemable notes in the aggregate principal amount of $150,000 with the first note being $75,000 and the second note being $75,000, convertible into shares of the Company’s common stock with a maturity date one year after issuance or January 13, 2016. The first of the two notes (the “First Note”) shall be paid for by Adar upon execution of the SPA, and the second note (the “Second Note”) shall initially be paid for by the issuance of an offsetting $75,000 secured note issued to the Company by Adar (“Buyer Note”), provided that prior to conversion of the Second Note, Adar must have paid off the Buyer Note in cash. Under the terms of the First Note, at any time after 180 days, the holder may elect to convert all or part of the face value of the note into shares of the Company’s common stock without restrictive legend at a price (“Conversion Price”) for each share of Common Stock equal to 52% of the lowest trading price of the Company’s common stock for the twelve prior trading days including the day upon which a Notice of Conversion is received by the Company. If the shares are not delivered in 3 business days, to the holder, the Notice of Conversion may be rescinded. Under the terms of the Second Note, the holder is entitles at its option, after the expiration of the requisite Rule 144 holding period and after full cash payment for the promissory note issued by the holder to the Company simultaneously with the issuance by the Company of this note (the “Holder Issued Note”) to convert all or part of the Note then outstanding into shares of the Company’s common stock equal to 52% of the lowest trading price of the Company’s common stock for the twelve prior trading days including the day upon which a Notice of Conversion is received by the Company. If the shares are not delivered in 3 business days, to the holder, the Notice of Conversion may be rescinded. With respect to the First and Second Notes, in the event that the Company experiences a DTC “Chill” on its shares the conversion price shall be decreased to 42% instead of 52% while the “Chill” is in effect, and in no event shall the holder be allowed to effect a conversion, if such conversion, along with other shares of the Company common stock beneficially owned by the holder and its affiliates would exceed 9.9% of the outstanding shares of the common stock of the Company. Further, with respect to the Second note, in the event the Company is not “Current” in its SEC filings at the time the note is cash funded, the discount shall be decreased to 40% instead of 52%. In respect of the First and Second notes interest on any unpaid principal balance of the Notes shall be paid by the Company in common stock (the “Interest Shares”). The Holder may at any time send a Notice of Conversion for Interest Shares based on the aforementioned formula for all or part of interest payable.

F-7

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5- Convertible Notes

(4)	Convertible note due on January 13, 2016 (cont’d)

During the first 180 days the Company may redeem the First Note by paying to the holder an amount as follows: (i) if the redemption is in the first 90 days the note is in effect an amount equal to 125% of the unpaid principal amount of the note along with accrued interest; (ii) if the redemption is after the 91st day the note is in effect then the

Company may redeem the note in an amount equal to 135% of unpaid principal and interest. The note is not redeemable after 180 days.

The Second Note may not be prepaid, except that if the First Note is redeemed by the Company within 6 months of the issuance date of such note, the obligations of the Company under the Second Note will be automatically deemed satisfied and the Second Note and the Holder Note will be deemed canceled and of no further force or effect.

Upon funding of each Note the Company shall pay $3,750 in legal fees and fees to Carter, Terry & Company of $7,500.

On January 15, 2015 the Company received net proceeds from Adar totaling $63,750 in the total gross amount of $75,000. Financing fees of $7,500 and legal fees of $3,750 were paid.

In our evaluation of the financing arrangement, we concluded that the conversion features were not afforded the exemption as a conventional convertible instrument and it did not otherwise meet the conditions set forth in current accounting standards for equity classification. Accordingly, they do not meet the conditions necessary to obtain equity classification and are required to be carried as derivative liabilities. (See footnote 11 for derivative disclosure)

Additionally, the Company evaluated the convertible notes in note 6 (1) above and concluded that these are tainted due to the variable conversion rate of the above the convertible notes and as such they do not meet the conditions necessary to obtain equity classification and are required to be carried as derivative liabilities. (See footnote 9 for derivative disclosure)

The carrying value of certain convertible notes (CN#1, CN#2 and CN#3) are as follows

	CN#1			CN#2			CN#3			Total
Carrying value, December 31, 2013	$	-		$	-		$	-		$	-
Add: Face value of certain convertible notes		125,000			100,000			-			225,000
Less: unamortized discount		(79,860	)		(48,371	)					(128,231	)
Carrying value, December 31, 2014		45,140			51,629			-			96,769

Add: Face value of certain convertible notes		125,000			-			75,000			200,000

Total Face value of certain convertible notes		250,000			100,000			75,000			425,000
Less: converted face value to shares		(40,000	)		(6,775	)		-			(46,775	)
Less: unamortized discount		(137,694	)		(7,010	)		(58,959	)		(203,663	)
Carrying value	$	72,306			86,215		$	16,041			174,562

Amortization of the discount over the three months ended March 31, 2015 totaled $124,567, which amount has been recorded as Accretion of discounts on convertible notes and is reflected on the Company’s balance sheet as Convertible Note Liabilities, Net. The unamortized discount of $203,663 associated with CN#1, CN#2 and CN#3 will be expensed in future periods.

F-8

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6 – Common Stock and Stock-Based Compensation

Common stock

Shares issued in current period ended March 31, 2015:

On February 27, 2015, the company received a conversion notice from an investor requesting to convert $40,000 in principal and $1,613 of accrued interest from the first note into 1,141,587 shares at $0.036452.

On March 26, 2015, the company received a conversion notice from an investor requesting to convert $6,775 in principal from the second note into 588,235 shares at $0.01152.

Shares issued in the fiscal year ended December 31, 2014

On April 30, 2014, the Company received the final $28,000 installment in respect of a funding agreement entered into on June 17, 2013 (ref: Note 10) for a total of $100,000. The Company accepted a subscription for 933,333 shares of common stock at $0.03 per share for cash proceeds of $28,000 and the Company also agreed to issue a 2-year warrant entitling the holder to acquire an additional 93,333 and shares of common stock at an exercise price of $0.30 per share.

On August 8, 2014 the Company agreed to issue 500,000 fully paid for and earned restricted shares of the Company’s common stock under an agent agreement with Carter, Terry & Company (“C&T”). The Company recorded $15,000 as financing costs, which was the fair market value of the shares on the agreement date.

On August 22, 2014, the Company settled certain unrelated third party debt in the amount of $50,572 by way of the issuance of 2,528,600 shares of the Company’s common stock at $0.02 per share with a fair value of $83,192.The Company recognized loss on the debt settlement in the amount of $32,620.

During the period ended September 30, 2014 the Company agreed to issue a total of 307,482 restricted shares of the Company’s common stock under an agent agreement with C&T, which equal to the 4% of $225,000 capital raised divided by the closing price of the stock on the date of close.

On October 17, 2014, the Company issued 3,500,000 shares of the Company’s common stock at $0.0213 per share with a fair value of $74,550 as stock awards to officers and directors of the Company.

As of March 31, 2015 and December 31, 2014, there were a total of 178,323,944 and 176,594,122 shares issued and outstanding, respectively.

Stock award and stock option

On October 17, 2014 the Company’s Board of Directors approved a 2014 Stock Option and Award Plan. Under the Stock Option and Award Plan, the Company granted Mr. Woywod, director of the Company, 500,000 stock awards and Mr. Harney, director of the Company, 3,000,000 stock awards, all of which were fully vested on the date of issue. The Company also granted Mr. Woywod 500,000 incentive stock options at an exercise price of $0.03 per share for a term of 2 years form the date of grant, which options also vested immediately.

Stock Award

As a result of the stock awards granted, the Company recorded stock based compensation expenses totaling $74,550 as consulting fees during the year ended December 31, 2014.

F-9

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6 – Common Stock and Stock-Based Compensation (continued)

Stock award and stock option (cont’d)

Stock Option

The following tables summarizes the information concerning stock options outstanding as of March 31, 2015 and December 31, 2014:

	March 31, 2015			December 31, 2014
	Shares	Weighted Average Exercise Price $		Shares	Weighted Average Exercise Price $
Outstanding at beginning of the year	500,000			-		-
Granted	-		-	500,000		0.03
Exercised	-		-	-		-
Expired or cancelled	-		-	-		-
Outstanding at the period	500,000		0.03	500,000		0.03

Exercise Price				Number Outstanding				Weighted Average Remaining Contractual Life			Number Subject to Exercise
$	0.03				500,000				1.54		500,000

The Company recognized stock-based compensation of $9,832 as consulting fees during the year ended December 31, 2014 in respect of the aforementioned stock option.

Valuation Assumptions

The following table presents the range of the weighted average fair value of options granted and the related assumptions used in the Black-Scholes model for stock option grants made during the year ended December 31, 2014:

	Options Granted
	October 17, 2014
Fair value of options granted	$	0.021
Assumptions used:
Expected life (years) (a)		2
Risk free interest rate (b)		0.39	%
Volatility (c)		261	%
Dividend yield (d)		0.00	%

F-10

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6 – Common Stock and Stock-Based Compensation (continued)

Stock award and stock option (cont’d)

Stock Option (cont’d)

	a)	Expected life: The expected term of options granted is determined using the “shortcut” method allowed by SAB No.107. Under this approach, the expected term is presumed to be the mid-point between the vesting date and the end of the contractual term.
	b)	Risk-free interest rate: The rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected life of the options.

	c)	Volatility: The expected volatility of the Company’s common stock is calculated by using the historical daily volatility of the Company’s stock price calculated over a period of time representative of the expected life of the options.
	d)	Dividend yield: The dividend yield rate is not considered in the model, as the Company has not established a dividend policy for the stock.

Share Purchase Warrants

During the year ended December 31, 2014 the Company issued a 2-year warrant entitling the holders to acquire an additional 93,333 shares of common stock at an exercise price of $0.30 per share as part of the Funding Agreement described above in Note 9.

As March 31, 2015 and December 31, 2014, the following share purchase warrants were outstanding:

	Warrants		Weighted Average Exercise Price
Outstanding - December 31, 2013		856,667		0.12
Granted		93,333		0.30
Forfeited/Canceled		-		-
Exercised		-		-
Outstanding – December 31, 2014		950,000		0.14
Outstanding – March 31, 2015		950,000		0.14
Exercisable – March 31, 2015 and December 31, 2014		950,000		0.14

The intrinsic value of these warrants was $0 at March 31, 2015 and December 31, 2014.

Note 7 - Derivative Liabilities

(1)	Derivative liabilities from convertible notes

On August 22, 2014, the Company entered into a convertible loan agreement with an investor (the “CN#1”) see below which the Company concluded that these are tainted due to the variable conversion rate of the below convertible notes and as such they do not meet the conditions necessary to obtain equity classification and are required to be carried as derivative liabilities.

F-11

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 7 - Derivative Liabilities (continued)

(1)	Derivative liabilities from convertible notes (cont’d)

On August 22, 2014, the Company entered into a convertible loan agreements with an investor (the “CN#1”). The Company received a total of $125,000 which bears interest at 8% per annum and is due on August 22, 2015. During the period ended March 31, 2015 the Company further received a total of $125,000 in respect to the CN#1. Interest shall accrue from the advancement date and shall be payable on August 22, 2015. Any portion of the loan and unpaid interest are convertible at any time at the option of the lender into shares of common stock of the Company at a conversion price equal to 52% of the lowest trading price of the Common Stock as reported on the OTCQB exchange for the twelve (12) prior trading days including the day upon which a Notice of Conversion is received by the Company.

On September 17, 2014, the Company entered into a convertible loan agreements with an investor (the “CN#2). The Company received a total of $100,000 which bears interest at 10% per annum and is due on April 16, 2015. Interest shall accrue from the advancement date and shall be payable on April 16, 2015. Any portion of the loan and unpaid interest are convertible at any time at the option of the lender into shares of common stock of the Company at a conversion price of the lower of (1) a 50% discount to the average of the three lowest daily trading prices for the previous twenty (20) trading days to the date of conversion; or (2) a 50% discount to the average of the three lowest daily trading prices for the previous twenty (20) trading days before the date that this note was executed.

On January 13, 2015, the Company entered into a convertible loan agreements with an investor (the “CN#3”). The Company received a total of $75,000 which bears interest at 8% per annum and is due on January 13, 2016. Interest shall accrue from the advancement date and shall be payable on August 22, 2015. Any portion of the loan and unpaid interest are convertible at any time at the option of the lender into shares of common stock of the Company at a conversion price equal to 52% of the lowest trading price of the Common Stock as reported on the OTCQB exchange for the twelve (12) prior trading days including the day upon which a Notice of Conversion is received by the Company.

Since equity classification is not available for the conversion feature, we were required to bifurcate the embedded conversion feature and carry it as a derivative liability, at fair value. Derivative financial instruments are carried initially and subsequently at their fair values.

We estimated the fair value of the derivative on the inception dates, and subsequently, using the Black-Scholes Merton valuation technique, adjusted for the effect of dilution, because that technique embodies all of the assumptions (including, volatility, expected terms, and risk free rates) that are necessary to fair value complex derivate instruments.

(2)	Derivative liabilities from share purchase warrants

On August 22, 2014, the Company entered into a convertible loan agreement with an investor (the “CN#1”) see above (2) which the Company concluded that these are tainted due to the variable conversion rate of the share purchase warrants (ref Note 10) and as such they do not meet the conditions necessary to obtain equity classification and are required to be carried as derivative liabilities.

F-12

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 7 - Derivative Liabilities (continued)

As a result of the application of ASC No. 815 in period ended March 31, 2015 the fair value of the conversion feature is summarized as follows:

Balance at December 31, 2013	$	23,790
Derivative addition associated with convertible notes		225,000
Recognition of derivative associated with tainted instruments		669,741
December 31, 2014 loss on change in fair value		1,332,898
Balance at December 31, 2014		2,251,429
Derivative addition associated with convertible notes		200,000
Derivative liability reclassified as additional paid in capital associated with conversion of shares		(148,316	)
Loss on change in fair value during the period		566,334
Balance at March 31, 2015	$	2,869,447

The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of March 31, 2015 and commitment date:

	Commitment Date			December 31, 2014			March 31, 2015
Expected dividends		0			0		0
Expected volatility	196.14 ~ 219.26		%	192.59		%	195.82	%
Expect term	0.59 ~ 1 years			0.29~0.64 years			0.04~0.80
Risk free interest rate	0.10~0.19		%		0.12	%	0.05~0.26	%

Note 8 - Commitments

(1)	Agency Agreement with Cater, Terry & Company

On August 8, 2014 the Company entered into an Agency Agreement (the “Agreement”) with Carter, Terry & Company (“C&T”) where under C&T will act as the Company’s exclusive Financial Advisor, Investment Bank and Placement Agent, on a "best efforts" basis for an initial period of 30 days, and then reverting to a non-exclusive financial advisor for the next twelve consecutive (12) months. Under the terms of the Agreement, C&T will receive 500,000, fully paid for and earned restricted shares of the Company’s common stock. In addition, in respect of any introductions those results in financing for the Company C&T shall receive fees as follows:

	a.		10% of the amount for any equity or hybrid equity capital raised up to $2,000,000
	b.		8% of the amount for any equity or hybrid equity capital raised up to $5,000,000
	c.		6% of the amount for any equity or hybrid equity capital raised over $5,000,000

And;
	an amount of restricted shares equal to 4% of capital raised divided by the closing price of the stock on the date of close.

On August 8, 2014, the Company issued 500,000 shares of the Company’s common stock in consideration of $15,000 as financing costs pursuant the Agreement.

F-13

EPOXY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 8 – Commitments (continued)

(1)	Agency Agreement with Cater, Terry & Company (cont’d)

On August 22, 2014 and September 17, 2014 the Company raised $125,000 and $100,000, respectively, under two convertible notes (CN#1 and CN#2) and paid to C&T cash consideration of $22,500 as financing costs and issued 307,482 shares of the Company’s common stock in consideration of $9,000 as financing costs.

During the three month ended March 31, 2015 the Company raised $125,000 and $75,000, respectively, under two convertible notes (CN#1 and CN#3) and paid to C&T cash consideration of $26,250 as deferred financing costs.

(2)	Independent Contractor Agreement with Sherf Corporation

On January 15, 2015, the Company entered into an Independent Contractor Agreement (the “Agreement”) with Scherf Corporation (“Scherf”) of Las Vegas, Nevada for the provision of public relations services to the Company for an initial term of one year, expiring on December 31, 2015, with an option to renew for successive one (1) year terms upon mutual agreement of both parties.

Under the terms of the Agreement Scherf will provide communications with shareholders, drafting and placing press announcements and articles pertaining to the Company’s business and introduction to venture capital firms, hedge funds and other potential investors. In consideration for services provided, exclusive of venture capital introduction) Scherf shall receive compensation equal to 0.5% of the increase in the market cap of the Company from one fiscal quarter to the next. The compensation shall be paid in the form of common shares of the Company determined by the average closing price of the Company’s common stock over the last ten trading days of the fiscal quarter to be compensated for. Such compensation shall be paid within fifteen (15) days of the close of each fiscal quarter. Further the Company shall compensate Scherf for all venture capital introduction ate a rate of 3% of any and all funds received as investments by any venture capital, hedge fund or other investor introduced by Scherf. The compensation shall be paid in the form of common shares of the Company determined by the average closing price of the Company’s common stock over the last ten trading days of the fiscal quarter to be compensated for. Such compensation shall be paid within fifteen (15) days of the close of each fiscal quarter.

Further by resolution of the Board it was determined that Scherf shall receive additional compensation in the form of 1,000,000 restricted shares of the Company’s common stock as consideration for the translation of the Company’s website, and mobile application into German. At March 31, 2015 the consideration shares have not yet been issued. The Company will issue the shares upon completion of the services contemplated.

(3)	Service Agreement with Wheat Creative LLC

On February 1, 2015 the Company entered into a Services Agreement (the “Agreement”) with Wheat Creative LLC (the “Consultant”), a Nevada Limited Liability Company. Under the terms of the Agreement, the Consultant shall be engaged to redesign the Company’s mobile app for both iOS and Android. As consideration for services rendered, the Consultant shall receive a total of 200,000 shares of the Company’s restricted common shares, deliverable upon completion and delivery of the redesign of the Company’s mobile app for both iOS and Android. At March 31, 2015 the consideration shares have not yet been issued. The Company will issue the shares upon completion of the services contemplated.

(4)	Office Lease

On March 16, 2015 the Company entered into a six month lease commencing April 1, 2015 with certain other third parties in respect of a shared office and residential premises located in San Diego, California. The Company’s obligation under the terms of the lease is a total of $875 per month plus utilities. The Company paid a security deposit of $875 and the first month’s rent totaling $1,750 upon signing of the contract.

Note 9 – Subsequent events

On April 1 and April 22, 2015 respectively the Company received conversion notices from an investor requesting the conversion of a total of $93,225 in principal and $5,582 in accrued interest by way of issuance of a total of 8,591,945 shares of common stock.

On April 17, April 29, 2015 and May 7, 2015 respectively the Company received conversion notices from an investor requesting the conversion of a total of $60,000 in principal and $3,226 in accrued interest by way of issuance of a total of 3,702,000 shares of common stock.

F-14

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

This current report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

In this report unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares of our capital stock.

The management’s discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The following discussion of our financial condition and results of operations should be read in conjunction with our audited financial statements for the fiscal year ended December 31, 2014, as filed with the Securities and Exchange Commission on April 15, 2015, along with the accompanying notes. As used in this quarterly report, the terms "we", "us", "our", and the "Company" means Epoxy, Inc. (formerly Neohydro Technologies Corp.) and its wholly owned subsidiary Couponz, Inc.

Current Business

On July 19, 2013, the Company entered into an agreement to purchase Couponz, Inc. (“Couponz”), a company incorporated in the State of Nevada. Under the agreement, the Company had the right to acquire 100% of the ownership of Couponz, Inc. in exchange for the issuance of 24,514,319 shares of preferred stock of the Company and $100,000. The agreement provided for the preferred shares issued to be designated as 1 share of preferred to carry 15 shares of common voting rights and to be convertible into common shares on the basis of 2.5 shares of common for each 1 share of preferred. Mr. David Gasparine, the sole director of Epoxy Inc. (formerly NeoHydro Technologies Corp.), is also the controlling shareholder of Couponz, Inc., and, as such, the transaction is considered to be non-arm’s length. Mr. Gasparine became the controlling shareholder of the Company concurrent with the completion of the transaction.

On November 1, 2013, the Company completed the aforementioned transaction and Couponz, Inc. became a wholly owned subsidiary of the Company.

Couponz Inc. is the developer of Epoxy app, an application or "app" for iPhone iOS and Android operating systems. Epoxy is an innovative smart phone application designed and created to conveniently connect business owners and consumers in order to ease marketing frustrations. The mobile app gives loyal customers the ease of keeping track of rewards and punch cards all in one place while also giving opportunities to review and share businesses with friends. In turn, Epoxy provides businesses the ability to reward customers, share offers, and deliver information about special events with their customers. Epoxy designers are dedicated to providing a superior and easy-to-use product for business owners to reward loyal customers.

Our goal is to provide a simple and easy to use platform for consumers to find business information, including but not limited to product and service descriptions, promotions, loyalty programs, and customer reviews, as well as to provide business owners a simple and easy to use platform to promote their businesses to mobile app users. Through the use of research and development we will be able to continue evolving our platform and features provided for our users.

Epoxy, Couponz’s mobile app, is a “two-part” system that has a server that both a website and a mobile application access. The mobile app allows users to find local businesses that have an Epoxy membership. An app user can navigate to an individual business several ways. App users can find a specific business by searching for the specific name of the business, the category of the business or by the App users location and listed results on a Map View. App users can then filter the results of the businesses in the Map View by category. Once a business is chosen the app user is presented with a Business Landing Page or “BLP”. The BLP displays information about that specific business that the business owner has input including operating hours, locations, menus, phone numbers as well as marketing such as digital loyalty cards and coupons. Within the BLP app users can also create reviews or “Sticky Notes” about that individual business and review other Sticky Notes that have been previously created. When an app user opens a loyalty card or offer the app has a built in scanner that allows the staff to “punch” or “redeem” either offer. A loyalty card is scanned multiple times and once completely filled is valid for a specified offer from the business owner. The app user can collect or “save” filled loyalty cards to redeem at a later time. A coupon is a one-time use offer that once redeemed will disappear from the device and become de-active. A business needs no equipment as the scanner is built into the Epoxy application that is required to scan each unique QR code. Epoxy provides each business with their own unique code that is used to track each loyalty card and offer. Each time an app user redeems an offer or digitally receives a punch the system tracks that information and displays it on a website administration panel for the business owner to track.

The website serves as a merchant login where merchants can access an administration panel that allows them to create their BLP and add digital punch cards, offers, events a and send out direct messages to individuals or groups in real-time. The admin panel also will provide the merchants with analytics such as the number of recipients for these direct messages, the number of punch cards and offers that have been used as well as the individual customers who are recommending that particular business (the referral system is a pending patent). This will allow the merchant to distinguish between different levels of consumers and compensate accordingly. This also adds a level of security and accuracy to the loyalty and coupon program that is not practical with a paper system.

Our pricing for merchants is a simple flat membership fee of $99 a month, without any contracts. The mobile app is free for consumers to download, and is available on both Android and Apple platform.

We plan to expand geographically in stages. By the close of December 2015, we expect to grow beyond the Las Vegas market into the rest of the Southwestern United States. We have already begun this process with expansion into Southern California. Within two to three years (December 2016), we plan to expand into the Midwest, and within five years (December 2019) we plan to expand nationally. As we experience each stage of growth, we plan to increase our staff primarily through commission-based sales people, as opposed to salaried or hourly wage employees, thus minimizing the financial burden of each stage of expansion. We believe that this plan for expansion will also minimize the need for additional outside financing, as we plan to fund our growth primarily through the growth of our paying customer base.

Our primary philosophy is to provide excellent customer service to both app users and merchants, while utilizing feedback through our events, website and mobile app. The mobile application platform gives us an opportunity to seamlessly receive feedback while providing a service. Once feedback has been provided we can then study and then apply this to the system. We believe if you keep the marketing simple, to the point and clean people will be willing to listen and convert. Once a customer is willing to listen, they can be turned into more valuable, loyal customers.

Couponz’s product is marketed to Mobile App Users as well as Business owners.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2015 Compared to the Three Months Ended March 31, 2014.

Our net loss for the three-month period ended March 31, 2015 and 2014 is as follows:

	Three months ended
	March 31,
	2015			2014

Revenue	$	8,315		$	4,385

Operating Expenses
Depreciation		2,831			-
Professional fees		7,531			16,818
Software development expenses		15,388			7,715
Consulting fee		19,871			-
General and administrative expenses		49,346			7,461
Total operating expenses		94,967			31,994
Loss from operations		(86,652	)		(27,609	)

Other Income (Expenses):
Gain (Loss) on change in fair value of derivative liabilities		(566,334	)		2,974
Interest expenses		(153,110	)		(11,432	)
Total other expenses		(719,444	)		(8,458	)

Net loss	$	(806,096)		$	(36,067	)

During the comparative three month periods ended March 31, 2015 and 2014 the Company reported revenues of $8,315 and $4,385 respectively. The Company experienced an increase to consulting fees and general and administrative expenses during the most recent three months ended March 31, 2015 as we expanded our customer identification and cultivation plans to include increased marketing and advertising efforts, requiring more time from our key management and consultants.

Liquidity and Financial Condition

Working Capital

	At March 31, 2015			At December 31, 2014
Current Assets	$	177,758		$	64,833
Current Liabilities	$	3,212,020		$	2,492,709
Working Capital (Deficit)	$	(3,034,262	)	$	(2,427,876	)

Cash Flows

	Three Month Periods Ended
	March 31, 2015			March 31, 2014
Net cash used in operating activities	$	(88,911	)	$	(29,142	)
Net cash provided by financing activities	$	170,000		$	-
Net increase (decrease) in cash during period	$	81,089		$	(29,142	)

Operating Activities

Net cash used in operating activities was $88,911 for the three month period ended March 31, 2015 compared with cash used in operating activities of $29,142 in the same period in 2014. The increase in cash used in operating activities is predominantly attributable to various non-cash reconciliation adjustments including accretion of debt discount on convertible notes and the change in the fair value of our derivative liabilities, as well as increases to accounts payable and accrued expenses period over period as we were not able to retire our obligations as they became due.

Investing Activities

There were no investing activities during the three month period ended March 31, 2015 and 2014.

Financing Activities

Net cash provided by financing activities was $170,000 for the three month period ended March 31, 2015 compared to $nil of cash provided in the same period in 2014.

Going Concern

We believe that presently we have sufficient funds to operate for the coming 12 months. While our cash on hand presently falls short of our currently anticipated operating expenses, we believe any shortfall can be addressed by the anticipated increase to our revenues, the exercise of outstanding warrants or new loans and equity financing opportunities. We have no assurance that future financing will be available to us in the future on satisfactory terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our activities. Equity financing could result in additional dilution to existing shareholders.

Our Company has generated revenues of $8,315 and $4,385 in the three month periods ended March 31, 2015 and 2014, respectively, which amounts are not presently sufficient to cover our ongoing quarterly operating expenses. We have never paid dividends and it is unlikely we will generate sufficient earnings in the immediate or foreseeable future to meet our operational overhead. The continuation of our Company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at March 31, 2015, we had a working capital deficit of $3,034,262 and have an accumulated deficit of $3,039,059. These factors raise substantial doubt regarding our company’s ability to continue as a going concern. The financial statements included herein do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should our Company be unable to continue as a going concern.

During the next twelve months we expect to expend approximately $50,000 for operations of the Company in regard to the filing of reports with the requisite regulatory authorities and $125,000, including costs for advertising and marketing, as required with respect the operations of wholly-owned subsidiary, Couponz, Inc., including salaries, advertising and marketing, and any ongoing software development expenses.

We may require additional working capital to fund our business objectives. There can be no assurance that any additional financing will be available or accessible on reasonable terms, either by way of an equity financing or debt. If we cannot raise any additional funding we may either have to suspend operations until we do raise the cash, or cease operations entirely.

Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements that will have a current or future effect on our financial condition and changes in financial condition.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Financial Statements.

Recent Accounting Pronouncements

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The new standard will require debt issuance costs to be presented on the balance sheet as a direct reduction of the carrying value of the associated debt liability, consistent with the presentation of debt discounts. Currently, debt issuance costs are presented as a deferred asset. The recognition and measurement requirements will not change as a result of this guidance. The standard is effective for the annual reporting periods beginning after December 15, 2015 and will be applied on a retrospective basis. This amendment will not have a material impact on our financial statements.

The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company and are not required to provide this information.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

During the period covered by this report, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings and is not aware of any pending legal proceedings as of the date of this Form 10-Q.

ITEM 1A. RISK FACTORS

The Company is a smaller reporting company and is not required to provide this information.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On February 27, 2015, the company received a conversion notice from the aforementioned investor requesting to convert $40,000 in principal and $1,613 interest from a prior note into 1,141,587 shares at $0.036452 (ref: Note 5 to the financial statements included herein).

On March 26, 2015, the company received a conversion notice from an investor requesting to convert $6,775 in principal from the second note into 588,235 shares at $0.01152 (ref: Note 5 to the financial statements included herein).

The Company will claim an exemption from the registration requirements of the Securities Act of 1933, as amended, for the issuance of the aforementioned shares pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the purchasers are “accredited investors” and/or qualified institutional buyers, the purchasers have access to information about the Company and its purchase, the purchasers will take the securities for investment and not resale.

Other than as disclosed above, there were no unregistered securities to report which were sold or issued by the Company without the registration of these securities under the Securities Act of 1933 in reliance on exemptions from such registration requirements, within the period covered by this report, which have not been previously included in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company does not have any senior securities as of the date of this Form 10-Q.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS


Exhibit Description	Filed herewith	Form	Exhibit	Incorporated by reference Filing Date
Articles of Incorporation		S-1	3.1	03/18/08
By-laws as currently in effect		S-1	3.2	03/18/08
Agency Agreement with Carter, Terry & Company executed August 8, 2014		10-Q	10.1	08/14/2014
Form of Addendum between the Company and certain investors with convertible loans expiring November 27, 2015		10-Q	10.2	11/19/2014
August 22, 2014 letter agreement between the Company and Quarry Bay Equity Inc.		10-Q	10.3	11/19/2014
Form of employment agreement between the Company and David Gasparine		10-Q	10.4	11/19/2014
2014 Stock Option and Award Plan		10-Q	10.5	11/19/2014
Form of Stock Option Agreement		10-Q	10.6	11/19/2014
Form of Stock Award Agreement		10-Q	10.7	11/19/2014
Form of Note - LG Capital Funding LLC		10-Q	10.8	11/19/2014
Form of Note - JSJ Investments Inc.		10-Q	10.9	11/19/2014
Form of SPA and 8% Convertible Redeemable Notes entered into between the Company and Adar Bays LLC.		8-K	10.1	02/17/2015
Form of Independent Contractor Agreement between the Company and Scherf Corporation		8-K	10.2	02/17/2015
Form of Services Agreement between the Company and Wheat Creative LLC		8-K	10.3	02/17/2015
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act	X		31.1
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act	X		31.2
Certification of Principal Executive and Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act	X		32.1
Interactive Data files	X		101

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

	EPOXY, INC.

Date: May 20, 2015	By:	/s/ David Gasparine
	Name:	David Gasparine
	Title:	Chief Executive Officer (Principal Executive Officer), Treasurer, (Principal Financial Officer) Secretary, and Director

Attached files

Stock widget

Investing forum

Epoxy, Inc. Reports